Ashford abandons £25m housing PFI

A second single bidder social housing PFI bit the dust last week after Ashford Council dumped the Partners For Improvement consortium on its £25m social housing PFI scheme.

After two years of intensive negotiations, the council pulled out of the deal citing concerns about a rift between members of the consortium, the lack of competition, and the quality of the consortium’s work on Islington’s pathfinder social housing PFI.

The decision comes just weeks after the Treasury aborted Camden Council’s flagship social housing PFI scheme, deeming the single bidder scheme too costly and uncompetitive.

The news comes as a blow to United House, which features in the consortia for all three schemes. The other members of the Partners consortium are Hyde Housing and HBOS. Work on the 1,300 homes on the Stanhope Estate was to be carried out by United House, United House Maintenance, Rydon Property Maintenance and Hyde HA.

Paul McKenner, the project’s PFI manager at Ashford Council, told CJ: "You can’t set out on a 30-year contract with doubts about the ability of the consortium to work together and deliver."

He added: "We also felt the consortium had the upper hand in all the negotiations. We had to draw a line in the sand and say enough is enough."

McKenner said the Treasury and the Office of the Deputy Prime Minister (ODPM) had also expressed concern at the project’s single bidder status when the council had asked for extra credits for the scheme last year. "We weren’t comfortable about it and neither were the Treasury and ODPM."

Partners For Improvement chairman Andrew Mickleburgh told CJ: "We recognise the reasons why Ashford has decided to take the proposal for the Stanhope PFI to the market again.

"Through the negotiations between ourselves and Ashford, we have managed to advance the project significantly, clarifying a number of issues for both sides to a point whereby it means that the project can more easily be taken out to the market again."

He added: "It would be wrong to imply that there are tensions between the organisations under the Partners banner. We remain committed to the regeneration of Stanhope."

The scheme will be re-advertised in the OJEU in early July. The council is hoping to shortlist in October and choose a preferred bidder by May 2006.